Updated: Jun 9
Contributor: Micah Rea
Reddit, the oddball social media where people discuss dog breeds, cool places to visit, and premier food locations suddenly became a gold mine for young investors. The gold rush began when members of the Reddit Wall Street discussion forum discovered they could exploit the shorting of stocks by giant hedge fund companies. This caused Gamestop stocks to go volatile as 178,588,000 stocks were exchanged. Amongst this sudden exchange of stocks, the popular stock-trading app Robinhood blocked the opening of new Gamestop shares. Robinhood’s actions caused an uproar amongst investors, who claimed that Robinhood was partaking in market manipulation. Contrarily, Robinhood claims that they were protecting both investors and the market. Robinhood also demanded that they did not have the financial capabilities to support this sudden increase of transactions. Yet, this announcement was made after the social media outrage. This delay in communication caused rumors to be spread of Robinhood unfairly supporting big Wall Street banks, over their everyday users. Reddit and Twitter accounts with both big and small followings tweeted out their disapproval of Robinhood’s actions. Following this social media outrage, Robinhood’s rating on the Google Play store was reduced from 4.3 stars, to 1.5 stars out of 5. Google has since removed the negative reviews claiming they were “coordinated and inorganic”. Robinhood’s business model is based on free trade, these actions, justified or not, went against their own mission statement.
- By the time Robinhood communicated to the public they had already been slandered on social media. This shows that fast, clear communication via social media is needed before actions take place.
- As a company, sacrificing core values can cause outrage on social media. Social media’s ability to quickly spread information sets the groundwork for cancel culture to disrupt a company.
-Recognize why customers are upset and quickly apologize and offer solutions. Diffusing the situation is more important than being right.